Reason Foundation

Government Creates Poverty

Freedom leads to prosperity.

The U.S. government has "helped" no group more than it has "helped" the American Indians. It stuns me when President Obama appears before Indian groups and says things like, "Few have been ignored by Washington for as long as Native Americans."

Ignored? Are you kidding me? They should be so lucky. The government has made most Indian tribes wards of the state. Government manages their land, provides their health care, and pays for housing and child care. Twenty different departments and agencies have special "native American" programs. The result? Indians have the highest poverty rate, nearly 25 percent, and the lowest life expectancy of any group in America. Sixty-six percent are born to single mothers.

Nevertheless, Indian activists want more government "help."

It is intuitive to assume that, when people struggle, government "help" is the answer. The opposite is true. American groups who are helped the most, do the worst.

Consider the Lumbees of Robeson County, N.C.—a tribe not recognized as sovereign by the government and therefore ineligible for most of the "help" given other tribes. The Lumbees do much better than those recognized tribes.

Lumbees own their homes and succeed in business. They include real estate developer Jim Thomas, who used to own the Sacramento Kings, and Jack Lowery, who helped start the Cracker Barrel Restaurants. Lumbees started the first Indian-owned bank, which now has 12 branches.

The Lumbees' wealth is not from casino money.

"We don't have any casinos. We have 12 banks," says Ben Chavis, another successful Lumbee businessman. He also points out that Robeson County looks different from most Indian reservations.

"There's mansions. They look like English manors. I can take you to one neighborhood where my people are from and show you nicer homes than the whole Sioux reservation."

Despite this success, professional "victims" activists want Congress to make the Lumbees dependent—like other tribes. U.S. Rep. Mike McIntyre (D-N.C.), has introduced the Lumbee Recognition Act, which would give the Lumbees the same "help" other tribes get—about $80 million a year. Some members of the tribe support the bill.

Of course they do. People like to freeload.

Lawyer Elizabeth Homer, who used to be the U.S. Interior Department's director of Indian land trusts, say the Lumbees ought to get federal recognition.

"The Lumbees have been neglected and left out of the system, and have been petitioning for 100 years. ... They're entitled, by the way."

People like Homer will never get it. Lumbees do well because they've divorced themselves from government handouts. Washington's neglect was a godsend.

Some Lumbees don't want the handout.

"We shouldn't take it!" Chavis said. He says if federal money comes, members of his tribe "are going to become welfare cases. It's going to stifle creativity. On the reservations, they haven't trained to be capitalists. They've been trained to be communists."

Tribal governments and the Bureau of Indian Affairs manage most Indian land. Indians compete to serve on tribal councils because they can give out the government's money. Instead of seeking to become entrepreneurs, members of tribes aspire to become bureaucrats.

"You can help your girlfriend; you can help your girlfriend's mama. It's a great program!" Chavis said sarcastically.

Because a government trust controls most Indian property, individuals rarely build nice homes or businesses. "No individual on the reservation owns the land. So they can't develop it," Chavis added. "Look at my tribe. We have title and deeds to our land. That's the secret. I raise cattle. I can do what I want to because it's my private property."

I did a TV segment on the Lumbees that I included in a special called "Freeloaders." That won me the predictable vitriol. Apparently, I'm ignorant of history and a racist.

The criticism misses the point. Yes, many years ago white people stole the Indians' land and caused great misery. And yes, the government signed treaties with the tribes that make Indians "special." But that "specialness" has brought the Indians socialism. It's what keeps them dependent and poor.

On the other hand, because the U.S. government never signed a treaty with the Lumbees, they aren't so "special" in its eyes. That left them mostly free.

Freedom lets them prosper.

John Stossel is host of Stossel on the Fox Business Network. He's the author of Give Me a Break and of Myth, Lies, and Downright Stupidity. To find out more about John Stossel, visit his site at johnstossel.com. This column first appeared at Reason.com.